Gino's Surf owners awarded $1.2 million in dipsute with Harrison Township, building director

Gino’s Surf’s owners were awarded $1.2 million by a federal jury in its lawsuit against Harrison Township and its former building director for keeping a newly built attached bar closed for nearly a year.

The jury issued the verdict Tuesday following a six-day trial in front of Judge Arthur Tarnow in U.S. District Court in Detroit. About one third of the judgment is punitive damages against former building director Vijay Parakh.

The amount was less than what was sought but a victory for Gino’s, located on Jefferson Avenue along the Anchor Bay shore of Lake St. Clair in Harrison Township.

When the verdict was announced, “I looked at my wife (Dorothy) because my wife had such a big weight taken off her shoulders,” Nazar said. “I’m happy it’s over.”

“It’s been a long-time coming,” said the Nazars’ attorney Cindy Rhodes Victor. “It’s a great relief that the jury heard what happened and saw it the same way we did.”

Attorney Larry Dloski, representing the insurance carrier for the defendants, called the verdict the result of a “runaway jury.”

“The verdict far exceeds the evidence in the case,” Dloski said Thursday. “There will be post-trial motion and there will be an appeal.”

He declined to speculate on the amount that the evidence should have shown.

The dispute stemmed from Feb. 6, 2009 when Parakh shut down the facility during a grand opening party for a recently constructed addition, the Luna Kai bar that includes the “Miami deck,” featuring a tiki bar, table seating and a performance stage during warm weather.

Parakh had refused to issue a certificate of occupancy for the addition, so the party was moved to Gino’s banquet hall. Parakh showed up at the party and claimed the facility operated in violation of code and other requirements that night. He ordered it closed.

The addition remained shuttered for nearly a year due to defendants “demanding that plaintiffs rectify an ever-changing list of purported ‘deficiences’” for issues unrelated to the addition, such as “the landscaping outside the building as a whole,” and writing tickets against the facility, Victor says in court documents. It reopened in January 2010.

The lawsuit claim a Constitutional violation of substantive due process, that Parakh created the supposed violations in retaliation for his three-month suspension in 2008 for an unrelated matter. Parakh believed one of the township trustees at the time, Michael Rice, was connected to Gino’s Surf’s owners. Parakh sued Rice and three other trustees.

Nazar said he and Rice were friendly acquaintenances.

The Nazars argued the shutdown was blatantly wrong.

“We argued that he acted arbitrarily and capriciously when he denied the final order of occupancy, and on the night of Feb. 6 told everyone in the old section of Gino’s Surf to get out because they (the Nazars) didn’t have a certificate of occupancy,” their attorney, Rhodes Victor, said. “He acted out of evil motive or intent or had callous indifference.

“He killed the party. There was an estimated 500 to 1,000 people there. It was damaging.”

The award breaks down to $500,000 in “historical” lost profits, $400,000 in punitive damages, $250,000 in future lost profits and $60,000 in out-of-pocket costs.

The township’s insurance carrier, Midwest Participating Plan, is responsible for most or all of the award, although payment would be stalled pending the outcome of the appeal.

The Nazars also filed a $2 million lawsuit against the township and Parakh with the state -- separate from the federal filing -- that is before the Macomb County Circuit Court in Mount Clemens for slander and libel. It stems from Parakh’s report of the shutdown to the township board. The township has been removed from the case.

A status conference is scheduled for June 27 in front of circuit Judge Peter J. Maceroni. A trial date could be set this year if the case is not resolved.

Parakh in his report called the party “horrifying” and “out of control in the words of many,” and a passageway leading to an entrance was a “death trap.” He said the addition was unsafe and uninsured, and failed to comply with the building code and have a proper occupancy permit. He said the parking lot was dangerous, too.

An article about the report was published in The Macomb Daily.

Nazar said Thursday the resolution of the cases may allow him to pursue locating a cruise-ship style hotel and entertainment venue along the shore. But he said a decision has not been made.